Exploring some of the best options in the R5m to R20m luxury residential market
WORDS: KIM MAXWELL – PHOTOS: SUPPLIED
As South Africans take a breather going into 2021, what types of residential buying opportunities are there in the luxury apartment, duplex and home segment? We’ve heard a lot about first-time buyer residential activity, but low interest rates have also opened opportunities for homes priced between R5m and R20m. In FNB’s February 2021 Property Barometer, economist Siphamandla Mkhwanazi says the home-buying market is showing resilience as more South Africans switch from renting to buying. The market also continues to see bigger, mainly freestanding, properties gain in popularity, as buyers respond to the demands of remote working.
Mkhwanazi says due to receding demand and rising incidents of selling due to emigration during 2020, prices in the upper end adjusted lower over a prolonged period. “There’s definitely more reception to accepting lower offers,” says Horizon Capital MD David Sedgwick about the Cape Town urban luxury market. He estimates that in the R20m range, with various options to choose from, prices have dropped by at least 10%. “There are local buyers with a lot of cash, but many are playing the wait-and-see game. There still isn’t any sense of urgency.” Meanwhile in R7m to R10m two bedroom apartments that are lock up and go, Sedgwick says interest from afar is plentiful, but potential buyers in say, Germany, want to see development sites and get a sense of the suburb before committing.
He sees the local switch from renting to buying as happening more in lower-priced central city apartments. “Our experience is that buyers in lower price points are more sensitive to affordability challenges, so when interest rates change it doesn’t cost much more to buy in the R1m to R2m category, as to rent. Last year we actually redesigned one or two planned pricier floors in our Vredehoek The Vera development, to cater to that R1m to R2m buyer.” Those units sold out.
In the R5m to R20m range, Horizon’s City Bowl apartments aren’t getting much traction. The exception is family homes. The Azure in Camps Bay is priced at R20m. “The last 260m2 unit ticks the boxes as a perfect family home: four bedrooms, all en suite, with one that could be a study,” says Sedgwick. Features include a pool, security and CCTV, power inverter and borehole.
Set a few quieter streets back, with easy access to the beach and restaurants, it has an internal courtyard surrounding a Natal Mahogany tree. Add Lion’s Head views and Sedgwick says, “You almost feel like you’re on holiday living there.”
It used to be Gauteng that was the semigrating capital, but the biggest trend we’re seeing is people moving out of Cape Town homes to live in the countryside Ryk Neethling, marketing director, Val de Vie Estate
The property picture in the Winelands is rather different. “In the heart of the Boland Winelands, since September 2020, we’ve seen a renewed semigration trend with families relocating from Gauteng, seeking homes to purchase as well as a huge demand for rental properties,” says Pam Golding Property group chief executive Andrew Golding. “From the start of 2021, we’ve also received a flurry of serious enquiries for top end homes in Paarl estates and Franschhoek.”
Val de Vie Estate marketing director Ryk Neethling says their largest buyer category is actually local families moving from Cape Town in search of safety and space in this secure Winelands estate. “It used to be Gauteng that was the semigrating capital,” he says. “But the biggest trend we’re seeing is people moving out of Cape Town homes to live in the countryside. If they work at Investec, they’re only driving to the Foreshore for a weekly meeting. People want safety and lifestyle more.”
Price tags are buoyant. “Over the past 12 months, we’ve experienced a few interesting trends at Val de Vie, one being for larger stands and larger, high-end homes in the R15m plus range,” says Neethling, adding that the highest price paid to date was R32m for a five bedroom house. “We’ve broken records on sales since September 2020. We’ve registered 24 to 40 sales per month at our estate, and these are in the deeds office, so there is a bit of lag time.”
The rental market is flying too, with a shortage of homes. “They’re going for up to R45,000 per month for a three-bedroom house. There was over-supply of rental homes at one stage, but now we only have a handful to rent out. So if you’re signing tenants now, yields are looking good.” Pam Golding Properties is marketing Vini Fera, a luxury residential development at Anura wine farm outside Stellenbosch. “Now that remote working has become prevalent, quality of life is a key consideration when buying or renting,” says assistant area manager for Stellenbosch Katya Varga.
“With the new way of working, you can live anywhere. There’s no better place than a beautiful wine farm in Stellenbosch,” she says. Erven start at 755m2, with vacant land priced from R2,4m, and plot-and-plan homes from R4,9m (both VAT-inclusive). Pam Golding has seen demand increase for homes along the Garden Route too. Agent Tiaan Schutte says buyers looking to work from home, a lifestyle and pristine surrounds, are choosing places such as Pinnacle Point Estate for “security and convenience rolled into one” plus green belts and world-class golfing. A four-bedroom modern home in Pinnacle Point Golf Estate is on the market for R6,9m.
This period has shown quite strongly that people have started to buy secure, quality products and upgrade their lifestyles. Tim Kloeck, CEO, Tricolt
For Gauteng developer Tricolt people spending more time at home is paying off. “This period has shown quite strongly that people have started to buy secure, quality products and upgrade their lifestyles,” says CEO Tim Kloeck. He’s seen three or four transactions in the R20 to R30m range at The Houghton development in Johannesburg. “In Waterfall City, one Ellipse Waterfall luxury penthouse fetched in excess of R50m. That kind of price point was usually only achieved in Cape Town or Sandton, so it’s saying that Waterfall is being seen as a serious residential offering,” Kloeck says.
These duplex apartments and penthouses offer modern convenience, close to businesses and Mall of Africa. “We’ve had a bit of movement in the R5m to R10m range at Ellipse too. So we’re doing well in the luxury market, but I don’t know if everybody else is,” says Kloeck. Tricolt’s Treetops Houghton development in Rosebank recently sold a 220m2 penthouse for around R8m. “For general products out there, I’d agree prices at the luxury end have come down. But at Tricolt we don’t adjust the pricing on our developments and we haven’t had too.”
Steyn City parkland residence offers a suburban experience, located between Johannesburg and Pretoria. Luxury buyers have not tapered off. “Steyn City sales were good during 2020, despite the pandemic and lockdown regulations that prevented us from showcasing our development to potential buyers for weeks,” says its marketing and events group head Zoe van Onselen. “The demand for secure living and the rise of estate living is evident: first and foremost our buyers are looking for security and peace of mind, and then it’s about lifestyle.” Is the home-buying market showing resilience as more South Africans switch from renting to buying homes? “We’ve experienced demand across all our property types, from luxury apartment living to cluster homes – for lock-up-and-go convenience – to our freehold stands, where buyers can build their dream home,” she says.
Steyn City offers various completed homes, from luxury two- and three-bedroom apartments to three- and four-bedroom cluster homes. Land sales start at R3,4m, up to approximately R18m. The lowest interest rates in five decades have made purchasing a more attractive proposition to renting, according to Van Onselen. “In our case, buyers look to acquire a home that matches their new needs of zoom-town living where families live, work and study at home.” She adds, “The return on this safe, secure investment is not simply monetary but the intrinsic value of living a better life in South Africa.”